Organic Packaged Food in the US

PROSPECTS

Despite category maturation organic packaged food still has potential

For many years, the US organic packaged food category has been in a state of consistent and rapid annual growth. The once niche category made even more niche by the processing that has long defined packaged food, maintained a fiercely loyal base of consumers for decades but began to rapidly grow from a small base as product availability increased nationally and more consumers came into the organic fold.

Organic dairy activity shifts as organic milk loses immunity to market challenges

Driven by a slew of challenges, including market saturation, changing consumer behaviour and the rise of plant-based competitors, the US milk industry has struggled for several consecutive years to achieve growth. Despite these challenges, however, organic milk has consistently been able to outperform the category and act as a reliable source of growth, offering optimism to milk producers and enticing many farmers and dairy companies to transition to organic production methods.

Appeal of the familiar and comfort replace niche and novelty attributes

While belief in its comparatively healthy attributes have long motivated many consumers to purchase more premium priced organic foods over conventional varieties, another motivating factor for many has been an attraction to the novelty and unique attributes of organic food. As with many products consumers purchase, a sense of exclusivity has proven attractive.

COMPETITIVE LANDSCAPE

In an acquisition environment, organic specialists perceived as particularly lucrative

Across the US packaged food industry, growth has become an increasing challenge for many manufacturers. As overall industry growth has slowed, new entrants have fuelled increased competition and consumer distrust of large manufacturers has grown.

Ready meals well positioned as the next frontier for organic expansion

As the US organic foods industry has grown, organic products have proliferated and seen strong sales growth across a wide variety of fresh and packaged food categories. While fresh produce initially led the way in organic expansion, the industry’s continued ascent to mainstream status has resulted in growth in other categories less historically amenable to organic production.

As integrity concerns abound, organic dairy manufacturers are accused of noncompliance

For many US consumers who purchase organic foods, a motivating factor is concern over the health and safety of conventional varieties and a desire for greater security and confidence in purchasing organic varieties. Given the strict organic standards required for certification, many consumers feel a sense of security in purchasing organic foods.

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